Last year the Federal Government passed a bill to help homeowners who are having difficulty paying their Monthly Mortgage Payments.
While many homeowners hired a lawyer to deal with their Mortgage Lender, it is simple to request and apply for Modification by yourself thereby saving thousand of dollars.
Recently I have had the benefit of learning how the Modification process works.
The Mortgage Companies are losing millions from homeowners who cannot pay their mortgage payment and these same people, after refinancing their homes when the Real Estate market was great is now faced with a mortgage amount that is more than what the house is currently worth.
So, the homeowner has two choices, either I let the bank foreclose on the property or ask the bank to Modify the Mortgage loan.
Modification is when the lender agrees to modify the terms of your mortgage without you having to refinance.
With millions of homeowners looking to modify their mortgage, the mortgage lenders are working first with borrowers who are delinquent for two months or more.
A call to your Lender Loss Mitigation Department will inform you about your best option depending on your individual situation.
To modify the terms of your mortgage, you will need the following documents: - Hardship Letter:- The homeowner will write this letter to the Lender explaining why he or she is having difficulty paying the Monthly Payments.
Some of the reasons could be the homeowner or spouse lost their job, gotten sick and couldn't work, reduced working hours thus less income or it can be any thing that caused the loss of income.
Also state if it is your primary residence.
- Income and Expense Statement:- Make a list of all your Monthly Income including rent from other properties as well.
Your expenses should be your mortgage/s, utilities, car expenses like gas and insurance, cost of food for the month, phones, cable, internet, credit card minimum payments, children activities and any other monthly expenses you may have.
Try to be as accurate as possible.
- Pay stubs:- Your past month pay stubs.
- Bank Statement:- Your most recent bank statement.
Remember to include all pages even if there is nothing on the page.
- Rental receipts:- If you are collecting rent, include proof of rental income.
Most importantly, always put your loan number on every page that you send to your lender.
Address all documents to the Loss Mitigation Department.
Most Mortgage lenders will require you to fax the documents so call your Lender and get the fax number.
Remember to update your documents every thirty days, this means sending your recent pay stubs and bank statement.
The Modification process usually takes a few months because of the large amount of applications that has to be processed.
However, if you are still paying the monthly payments continue doing so.
Sometimes the Lender will give you a trial period and reduces your monthly payment.
I would recommend that you continue to pay the full monthly payments because if you are denied the modification, you will have to pay the amount that you didn't pay and that can add up considerable.
I have given you a guide as best and as simple as I could so you can appeal to your Mortgage lender to change the terms of your Mortgage.
Written by Sase Persaud.